MR.  WEBSTER'S   SPEECHES 


THE  SENATE, 


UPON  THE  QUESTION  OF  RENEWING  THE  CHARTER 


BAAK    OF   THE    HATTED    STATES. 


Delivered  May  25,  and  28,  1832. 


WASHINGTON: 

PRINTED    3Y   GALES   AND   SEATOV. 
1832. 


SPEECH. 

After  the  bill  had  been  read,  and  Mr.  DALLAS  had  spoken, 
MR.  WEBSTER  said,  that,  though  he  Avas  entirely  satisfied  with  thegeneral 
view  taken  by  the  Chairman  of  the  Committee,  (Mr.  Dallas,)  and  with  nis  ex- 
planation of  the  details  of  the  bill,  yet  there  were  a  few  topics  upon  which  he 
desired  to  offer  some  remarks,  and  if  no  other  gentleman  wished,  at  present, 
to  address  the  Senate,  he  would  avail  himself  of  this  opportunity. 

A  considerable  portion  of  the  active  part  of  life  has  elapsed,  said  Mr.*W., 
since  you  and  Ir  Mr.   President,  and  three  or  four  other  gentlemen,  now  in 


the  Senate,  acted  our  respective  parts,  in  the  passage  of  the  bill,  creating  the 
present  Bank  of  the  United  States.  We  have  lived  to  little  purpose,  as  pub- 
lic men,  if  the  experience  of  this  period  has  not  enlightened  our  judgments, 
and  enabled  us  to  revise  our  opinions;  and  to  correct  any  errors  into  which 
\ve  have  fallen,  if  such  there  are,  either  in  regard  to  the  general  utility  of 
a  National  Bank,  or  the  details  of  its  constitution.  I  trust  it  will  not  be 
unbecoming  the  occasion,  if  I  allude  to  your  own  important  agency  in  that 
transaction.  The  bill  incorporating  the  Bank,  and  giving  it  a  constitution, 
proceeded  frorn^a  committee  in  the  House  of  Representatives,  of  which  you 
were  Chairman,' and  was  conducted  through  that  House  under  your  distin- 
guished lead.  Having  recently  looked  back  to  the  proceedings  of  that  day,  I 
must  be  permitted  to  say,  that  I  have  perused  the  speech,  by  M^ich  the  sub- 
ject was  introduced  to  the  consideration  of  the  House,  with  a  revival  of  the 
feeling  of  approbation  and  pleasure  with  which  I  heard  it;  and  I  will  add, 
that  it  would  not,  perhaps,  now  be  ea£jr  to  find  a  better  brief  synopsis  of  those 
principles  of  currency  and  of  banking,  which,  since  they  spring  from  the  na- 
ture of  money  and  of  commerce,  must  be  essentially  the  same,  at  all  times,  in 
all  commercial  communities,  than  that  speech  contains.  The  other  gentle- 
men, now  with  us  in  the  Senate,  all  of  them,  I  believe,  concurred  with  the 
Chairman  of  the  Committee,  and  voted  for  the  bill.  My  own  vote  was  against 
it.  This  is  a  matter  of  little  importance;  but  it  is  connected  with  other  cir- 
cumstances, to  which  I  will,  tor  a  moment,  advert.  The  gentlemen  with 
whom  I  acted  on  that  occasion  had  no  doubts  of  the  constitutional. power  of 
Congress  to  establish  a  National  Bank;  nor  had  we  any  doubts  of  the  general 
utility  of  an  institution  of  that  kind.  We  had,  indeed,  most  of  us,  voted  for  a 
bank,  at  a  preceding  session.  But  the  object  of  our  regard  was  not  whatever 
might  be  called  a  Bank.  We  required  that  it  should  be  established  on  certain 
principles,  which  alone  we  deemed  safe  and  useful,  made  Object  to^certain 
fixed  liabilities,  and  so  guarded,  that  it  could  neither  move  voluntarily,  nor 
be  moved  by  others,  out  of  its  proper  sphere  of  action.  We  wished  lor  an 
independent  bank,  a  specie  paying  bank,  a  steady  and  cifctious,  not  a  specula- 
tive Lank.  We  dreaded  all  irregularities  in  the  currency;  we  resisted  an]%  the 
least,  tendency  to  paper  money,  or  the  suspension  principle;  and  of  all  modes 
of  speculation,  we  most  abhorred  that  which  finds  opportunity  to  enrich  it- 
self in  the  disordered  state  of  the  circulating  medium,  the  daily  interchange 
of  payment  and  receipts.  Thejaill,  when  first  introduced,  contained  fea- 
tures, to  which  \ve.  should  never  have  assented,  and  we  set  ourselves  ac- 
cordingly to  work,  with  a  good  deal  of  zeal,  in  order  to  eflect  sundry 
amendments.  In  some  of  these  proposed  amendments,  the  Chairman,  and 
those  who  acted  with  him,  finally 'concurred.  Others  they  opposed.  The 
result  wras,  that  several  most  important  amendments,  as  I  thought,  prevailed. 
But  there  still  remained,  in  my  opinion,  objections  to  the  bill,  which  jus- 
tified a  persevering  opposition,  till  they  should  be  removed. 

The  first  objection  was  to  the  magnitude  of  the  capital.  In  its  original 
form,  the  b\\\  provided  for  a  capital  of  thirty -five  millions,  with  a  power  in 
Congress  to  increase  it  to  fifty  millions.  This  latter  provision  was  struck  out, 
on  the  motion  of  a  very  intelligent  gentleman  from  New  York,  (Mr.  Cady,) 
and  I  believe,  sir,  with  your  assent.  But  I  was  of  opinion  that  a  capital  of 
thirty-five  millions  was  more  than  was  called  for  by  the  circuinstandfes  of  the 
country.  The  capital  of  the  first  Bank  was  but  ten  millions,  and  it  had  not 


been  shown  to  be  too  small;  and  there  certainly  was  no  good  grounds  to  say, 
that  the  business,  or  the  wants  of  the  country,  had  grown,  in  the  mean  time, 
in  the  proportion  of  thirty  five  to  ten.  But  the  state  of  things  has  now  become 
changed.  A  greatly  increased  population,  and  a  greatly  extended  commercial 
activity,  especially  in  the  west  and  southwest,  evidently  require  an  enlarged 
capacity  in  the  National  Bank.  The  capital,  therefore,  is  less  disproportioned 
to  the  occasion,  than  it  was  sixteen  years  ago,  and  whatever  of  disproportion 
may  be  thought  still  to  exist  will  be  constantly  decreasing.  The  augmentation 
of  banking  capital  in  State  institutions  is  by  no  means  a  ground  for  reducing 
the  capital  of  this  Bank.  At  first  view  there  might  appear  to  be  some  reason 
in  such  a  suggestion,  but  I  think  a  further  reflection,  on  the  duties  expected 
to  be  performed  by  the  Bank,  in  relation  to  the  general  currency  of  the  coun- 
try, will  reject  it.  One  object  of  the  Bank  undoubtedly  is,  to  exercise  a  salu- 
tary check  over  the  superabundant  issues  of  other  institutions,  should  such 
happen  to  take  place;  and  its  means  ought  to  be-ndequate  to  this  end.  On. 
the  whole,  I  am  disposed  to  continue  the  capital  as  it  is. 

There  was  another  objection.  The  bill  had  divided  the  stock  into  shares  of  one 
hundred  dollars  each,  not  of  four  hundred  dollars  each,  a$  in  the  first  Bank: 
and  it  has  established  such  a  scale  of  voting,  by  the  stockholders,  as  showed 
it  to  be  quite  practicable  for  a  minority,  in  interest,  to  control  all  elections, 
and  to  seize  on  the  entire  direction  of  the  Bank.  It  was  on  this  very  ground, 
it  was  under  the  apprehension  of  this  very  evil,  that  the  last  attempt  to  amend 
the  bill,  made  by  me,  proceeded.  That  attempt  was,  a  motion  to  diminish 
the  number  of  snares,  by  raising  the  amount  of  each,  from  one  hundred  dollars 
to  four  hundred.  If  we  were  now  creating  a  new  Bank,  I  should  insist,  as 
before,  on  such  a  change;  but  the  evil  is  not  to  be  feared,  now  that  the  stock 
is  distributed,  has  found  its  way  into  hands  desirous,  generally  speaking,  of 
holding  it,  and  thus  offering  no  opportunity  to  that  kind  of  management  and 
speculation. 

There  was  yet  one  other  provision  of  the  bill,  which  was  regarded  as  un- 
necessary and  objectionable.  That  was,  the  power  reserved  to  the  Govern- 
ment of  appointing  fire  of  the  Directors.  We  had  had  no  experience  of  our 
own  of  the  effect  of  such  Government  interference  in  the  direction  of  the 
Bank;  and,  in  other. countries,  it  had  been  found  that  such  connexion  between 
Government  and  banking  institutions  produces  nothing  but  evil.  The  credit 
of  Banks  has  generally  been  very  much  in  proportion  to  their  independence  of 
Government  control.  "While  acting  on  true  commercial  principles,  they  are 
useful  both  to  Government  and  the  People;  but  the  history  of  the  principal 
moneyed  institutions  of  Europe  has  demonstrated,  that  their  efficiency  and  sta- 
bility consist  very  much  in  their  freedom  from  all  subjection  to  State  interests 
and  Stajte  necessities.  The  real  safety  to  the  public  lies  in  the  restraints  and 
liabilities  imposed  by  law,  and  in  the  interest  which  the  proprietors  them- 
selves-have  in  a  judicious  management  of  the  affairs  of  the  corporation.  I  will 
only  say,  on  this  paft  of  the  subject,  that  it  is  unquestionably  true  that  the 
successful  career  of  this  institution  then  commenced,  when  its  stoclc,  leaving 
the  hands  of  speculation,  came  to  be  owned,  for  the  common  purposes  of 
investment,  by  such  as  desired  to  make  investments,  and  when  the  proprietors 
exercised  their  proper  discretion  in  constituting  their  part  of  the  direction, 
with  a  single  view  of  giving  to  the  Bank  a  safe  and  competent  administration. 
All  Banks  will  be  sufficiently  ready  to  accommodate  Government.  Their 
interest  is  a  security  for  their  good  disposition  in  that  respect.  I  cannot  say, 
however,  that  I  see,  at  present,  any  evil  .arising  from  the  appointment  of  five 
of  the  Directors  by  the  Government,  and  shall,  therefore,  propose  no  change 
in  that  particular.  . 

The  question  now  is,  sir,  whether  this  institution  shall  be  continued?  We 
ought  to  treat  it  as  a  great  public  subject;  to  consider  it,  like  statesmen,  as  it 
regards  the  great  interests  of  the  country,  and  with  as  little  mixture  as  possi- 
ble of  all  minor  motives. 

The  influence  of  the  Bank,  Mr.  President,  on  the  interests  of  the  Govern- 
ment, and  the  interests  of  the  People,  may  be  considered  in  several  points  of 
view.  It  may  be  regarded  as  it  affects  the  currency  of  the  country;  as  it  af- 
fects the  collection  and  disbursement  of  the  public  revenue;  as  it  respects  fo- 
reign exchanges;  as  it  respects  domestic  exchanges;  and  as  it  affects,  either 


generally  or  locally,  the  agriculture,  commerce,  and  manufactures  of  the 

Union. 

First,  as  to  the  currency  of  the  country.  This  is,  at  all  times,  a  most  im- 
portant political  object.  A  sound  currency  is  an  essential  and  indispensable 
security  tor  the  fruits  of  industry  and  honest  enterprize.  Every  man  of  pro- 
perty or  industry,  every  man  who  desires  to  preserve  what  he  honestly  pos- 
sesses, or  to  obtain  what  he  can  honestly  earn,  has  a  direct  interest  in  mantain- 
inga  sale  circulating  medium;  such  a  medium  as  shall  be  a  real  and  substantial 
representative  of  property,  not  liable  to  vibrate  with  opinions,  not  subject  to 
be  blown  up  or  blown  down,  by  the  breath  of  speculation,  but  made  stable 
and  secure  by  its  immediate  relation  to  that  which  the  whole  world  regards  as 
of  permanent  value.  A  disordered  currency  is  one  of  the  greatest  politi- 
cal evils.  It  undermines  the  virtues  necessary  for  the  support  of  the  social 
system,  and  encourages  propensities  destructive  of  its  happiness.  It  wars 
against  industry,  frugality,  and  economy;  and  it  fosters  the  evil  spirits  of  ex- 
travagance and  speculation.  Of  all  the  contrivances  for  cheating  the  laboring 
classes  of  mankind,  none  has  been  more  effectual  than  that  which  deludes 
them  with  paper  money.  This  is  the  most  effectual  of  inventions  to  fertilize 
tiie  rich  man5s  field  by  the  sweat  of  the  poor  man's  brow.  Ordinary  ty- 
ranny, oppression,  excessive  taxation,  these  bear  lightly  on  the  happiness  of 
the  mass  of  the-  community,  compared  with  fraudulent  currencies,  and  the 
robberies  committed  by  depreciated  paper.  Our  own  history  has  recorded,  for 
our  instruction,  enough,  and  more  than  enough,  of  the  demoralising  tendency, 
the  injustice, and  the  intolerable  oppression,  on  the  virtuous  and  well-disposed, 
of  a  degraded  paper  currency,  authorized  by  law,  or  any  way  countenanced 
by  Government.  *  * 

We  all  know,  sir,  that  the  establishment  of  a  sound  and  uniform  currency 
was  one  of  the  great  ends  contemplated  in  the  adoption  of  the  present  consti- 
tution. If  we  could  now  fully  'explore  all  the  motives  of  thrae  who  framed  and 
those  who  supported  it,  perhaps  we  should  hardly  find  a  more  powerMone 
than  this.  The  object,  indeed,  is  sufficiently  prominent  on  the  face  of  the  Con- 
stitution itself.  It  cannot  well  be  questioned,  that  it  was  intended  by  that 
Constitution  to  submit  the  whole  subject  of  the  currency  of  the  country,  all 
that  regards  the  actual  medium  of  payment,  and  exchange,  whatever  that 
should  be,  to  the  control  and  legislation  of  Congress.  Congress  <&n  alone 
coin  money — Congress  can  alone  fix  the  value  of  foreign  coins.  No  State  can 
coin  money;  no  State  can  fix  the  value  of  foreign  coins;  no  State  (nor  even  Con- 
gress itself)  can  make  any  thing  a, tender  but  gold  and  silver  in  the  payment 
of  debts;  no  State  can  emit  bills  of  credit.  The  exclusive  po\«fer  of  regulating 
the  metallic  currency  of  the  country  would  seem  necessarily  to  imply,  or,  more 
properly,  to  include,  as  part  of  itself,  a  power  to  decide  how  far  that  currency 
should  be  exclusive — how  far  any  substitute  should  interfere  with  it,  and  what 
that  substitute  should  be.  The  generality  and  extent  of  the  power  granted  to 
Congress,  and  the  clear  and  well  defined  prohibitions,  on  tne  States,  leave 
little  doubt  of  an  intent  to  rescue  the  whole  subject  of  currency  from  the 
hands  of  local  legislation,  and  to  confer  it  on  the  General  Government.  But, 
notwithstanding  this  apparent  purpose  in  the  Constitution,  the  truth  is,  that 
the  currency  of  the  country  is  now,  to  a  very  great  extent,  practically  and  ef- 
fectually under  the  control  of  the  several  State  governments,  if  it  be  nol  more 
correct  to  say,  that  it  is  under  the  control  of  the  banking  institutions,  created 
by  the  States;  for  the  States  seem  first  to  have  taken  possession  of  the  power, 
and  then  to  have  delegated  it. 

Whether  the  States  can  constitutionally  exercise  this  power,  or  delegate  it 
to  others,  is  a  point,  which  I  do  not  intend,  at  present,  either  to  concede  or  to 
argue.  It  is  much  to  be  hoped,  that  no  controversy  on  the  poiot  may  ever  be- 
come necessary.  But  it  is  matter  highly  deserving  of  consideration,  that 
although  clothed  by  the  Constitution  with  exclusive  power  over  the  metallic 
currency,  Congress,  unless  through  the  agency  of  a  Bank  established  by  its 
authority,  has  no  control  whatever  over  that  which,  in  the  character  of  a 
mere  representative  of  the  metallic  currency,  fills  up  almost  all  the  channels 
(f  pecuniary  circulation. 

In  the  absence  of  a  Bank  of  the  United  States,  the  State  banks  become  ef- 
fectually the  regulators  of  the  public  currency.  Their  numbers,  their  capital, 


and  the  interests  connected  with  them,  give  them,  ii>  that  state  of  thing?,  a 
power  which  nothing  is  competent  to  control.  We  saw,  therefore,  when  the 
late  war  broke  out,  and  when  there  was  no  national  bank  in  being,  that  the 
State  institutions,  of  their  own  authority,  and  by  an  understanding  among 
themselves,  under  the  gentle  phrase  of  suspending  specie  payments,  every 
where  south  of  New  England,  refused  to  redeem  their  notes.  They  were 
not  called  to  answer  for  this  violation  of  their  charters,  as  far  as  I  remember, 
in  any  one  State.  They  pleaded  the  urgency  of  the  occasion,  and  the  public 
distresses;  and  in  this  apology  the  State  (iovernments  acquiesced.  Congress, 
at  the  same  time,  found  itself  in  an  awkward  predicament.  It  held  the 
whole  power  over  coins.  No  State,  or  State  institution,  could  give  circula- 
tion to  an  ounce  of  gold  or  of  silver,  not  sanctioned  by  Congress.  Yet  all  the 
States,  and  a  hundred  State  institutions,  claimed,  and  exercised,  the  right  of 
driving  coin  out  of  circulation  by  the  introduction  of  their  "own  paper;  and 
then  ot  depreciating  and  degrading  that  paper,  by  refusing  to  redeem  it-  As 
they  were  not  institutions  created  by  this  Government,  they,  were  not  an- 
swerable to  it.  Congress  could  not  call  them  to  account:  and  it  it  could, 
Congress  had  no  bank  of  its  own  whose  circulation  could  supply  the  wants 
of  the  community.  Coin,  the  substantial  constituent,  was,  and  was  admitted 
to  be,  subject  only  to  the  control  of  Congress;  but  paper,  assuming  to  be  a 
representative  of  this  constituent,  was  taking  great  liberties  with  it,  at  the 
same  time  that  it  was  no  way  amenabje  to  its  constitutional  guardian.  This 
suspension  of  specie  payments  was,  of  course,  immediately  followed  by  great- 
depreciation  # the  paper.  It  shortly  fell  so  low,  that  a  bill  on  Boston  could  not 
be  purchased  at  Washington  under  an  advance  of  from  twenty  to  twenty -five 
percent.  I  do  not  mean  to  reflect  on  jihe  proceedings  of  the  State  banks. 
Perhaps  their  best  justification  is  to  be  round  in  the  readiness  with  which  Go- 
vernment itself  borrowed  of  them  their  paper,  depreciated  as  it  was;  but  it 
certainly  becomes  us  to  regard,  attentively,  this  part  of  our  experience,  and 
to  guard,  as  far  as^fre  can,  against  similar  occurrences. 

I  am  of  opinion,  sir.  that  a  well  conducted  National  Bank  has  an  exceed- 
ingly useful  and  effective  operation  on  the  general  paper  circulation  of  the 
country.  I  think  its  tendency  is  manifestly  to  restrain,  within  some  bounds, 
the  paper  issues  of  other  institutions:  If  it  be  said,  on  the  other  hand,  that 
these  institutions,  in  turn,  hold  in  check  the  issues  of  the  National  Bank,  so 
much  theoetter.  Let  that  check  go  to  its  full  extent.  An  over-issue  by  the 
Bank  itself  no  one  can  desire.  But  it  is  plain,  that,  by  holding  the  State  in- 
stitutions, which  come  into  immediate  contact  with  itself  and  its  branches, 
to  an  accountability  for  their  issues,  not  yearly  or  quarterly,  but  daily  and 
hourly,  an  important  restraint  is  exercised.  Be  it  remembered  always,  that 
what  it  is  to  expect  from  others,  it  is  to  perform  itself:  and  that  its  »\vn  paper 
is,  at  all  times,  to  turji  into  coin  by  the  first  touch  of  its  own  counter. 

Big,  Mr.  President,  so  important  is  this  object,  that  I  think,  that,  far  from 
diminishing  we  ought  rather  to  increase  and  multiply  our  securities;  and  I 
am  not  prepared  to  s:iy,  that  even  with  the  continuance  of  the  Bank  charter, 
and  under  its  wisest  administration,  I  regard  the  state  of  our  currency  as  en- 
tirely safe.  It  is  evident  to  n^,  that  the  general  paper  circulation  has  been 
extended  too  far  for  the  specie  basis  on  which  it  rests.  Our  system,  as  a 
system,  dispenses  too  far,  in  my  judgment,  with  the  use  of  gold  and  silver. 
Having  learned  the  use  of  ptper,  as  a  substitute  for  specie,  we  use  the  sub- 
stitute, I  fear,  too  freely.  It  is  true,  that  our  circulating  paper  is  all  redeem- 
able in  gold  and  silver-  Legally  speaking,  it  is  all  convertible  into  specie  at 
the  .  '"  l"  *'•-  j'older.  But  a  mere  legal  convertibility  is  not  sufficient. 
There  must  .^  ..i  actual,  practical,  never  ceasing  convertibility.  This,  I 
think,  is  not  at  .present  sufficiently  secured;  and  as  it  is  matter  of  high  inter- 
est, it  well  deserves  the  serious  consideration  of  the  Senate.  The  paper  cir- 
culation of  the  country  is,  at  this  time,  probably.  seventy-Jive  or  eighty  mil- 
lions of  dollars.  Of  specie,  we  may  have  twenty  or  tuenty-tuo  millions; 
and  <hi.s  principally  in  masses,  in  the  vaults  of  th,?  banks.  Now.  sir,  this  is  a 
state  of  things  which,  in  my  judgment,  leads  constantly  to  over  trading,  and 
to  ihe  consequent  excesses  and  revulsions,  which  so  often  disturb  the  regular 
course<»f  commercial  affairs.  A  circulation  consisting,  in  so  great  a  degree, 
of  paper,  is  easily  expanded,  to  furnish  temporary  capital  to  such  as  wish  to 


adventure  on  ne^y  enterprises  in  trade;  and  the  collection  in  the  banks  of 
most  of  what  specie  there  is  in  the  country,  affords  all  possible  facility  for  its 
exportation.  Hence,  over  trading  does  frequently  occur,  and  is  always  fol- 
lovyed  by  an  inconvenient,  sometimes  by  a  dangerous,  reduction  of  specie. 
It  is  in  vain  that  we  look  to  the  prudence  of  banks  for  an  effectual  security 
against  over  trading.  The  directors  of  such  institutions  will  generally  go  to 
the  length  of  their  means  in  cashing  good  noles.  and  leave  the  borrower  to 
judge  for  himself  of  the  useful  employment  of  his  money.  Nor  would  a  com- 
petent security  against  over  trading  be  always  obtained,  if  the  banks  were  to 
confine  their  discounts  strictly  to  business  paper,  so  denominated;  that  is,  to 
notes  and  bills  which  represent  real  transactions,  having  been  given  and  re- 
ceived, on  the  actual  purchase  and  sale  of  merchandise;  because  these  transac- 
tions themselves  may  be  too  far  extended.  In  other  words,  more  may  be  bought 
than  the  wants  of  the  community  may  require,  on  a  speculative  calculation  of 
future  prices.  Men  naturally  have  a  good  opinion  of  their  own  sagacity.  He 
who  believes  merchandise  is  about  to  rise  in  price,  will  buy  merchandise,  if 
he  possesses  money,  or  can  obtain  credit.  The  fact  of  actual  purchase,  there- 
fore, is  not  proof  of  really  subsisting  want:  and,  of  course,  the  amount  of  all 
purchases  does  not  correspond  always  with  the  entire  wants  or  necessities  of 
the  community.  Too  frequently  it  very  much  exceeds  that  measure.  If, 
then,  the  discretion  of  the  banks, -exercised  in  deciding  the  amount  of  their 
discounts,  is  not  a  proper  security  against  over  trading;  if  facility  in  obtain- 
ing bank  credits  naturally  fosters  that  spirit;  if  the  desire  of  gain  and  love  of 
enterprise  constantly  cherish  it;  and  if  it  finds  specie  collected  in  the  banks 
inviting  exportation,  what  is  the  remedy,  suited  and  adequate  to  the  case? 
Now,  1  think,  sir.  that  a  closer  inquiry  into  the  direct  source  of  the  evil  will 
suggest  the  remedv.  Why  have  we  so  small  an  amount  of  specie  in  circula- 
tion? Certainly  the  only  reason  is,  because  we  do  not  require  more.  We 
have  but  to  ask  its  presence,  and  it  would  return.  But  we  voluntarily  banish 
it,  by  the  great  amount  of  small  bank  notes.  In  most  of  tfcfc  States  the  banks 
issue  notes  of  all  low  denominations,  down  even  to  a  single  dollar.  How  is 
it  possible,  under  such  circumstances,  to  retain  specie  in  circulation?  All 
experience  shows  it  to  be  impossible.  The  paper  will  take  the  place  of  the 
gold  and  silver.  When  Mr.  Pitt,  in  the  year  1797,  proposed,  in  Parliament, 
to  authorize  the  Bank  of  England  to  issue  one  pound  notes,  Mr.  Burke  lay 
sick  at*Bath  of  an  illness  from  which  he  never  recovered,  and  hels  said  to 
have  written  to  the  late  Mr-  Canning,  "  Tell  Mr.  Pitt,  that  if  he  consents  to 
"  the  issuing  of  one  pound  notes,  he  must  never  expect  to  see  a  guinea  again." 
The  one  pound  notes  were  issued,  and  the  guineas  disappeared.  A  simi- 
lar cause  is  now  producing  a  precisely  similar  effect  Svith  us.  Small  note's 
have  expelled  dollars  and  half  dollars  from  circulation  in  all  the  States  in 
which  such  notes  are  issued.  On  the  other  hand,  dollars  and  half  dollars 
abound  in  those  States  which  have  adopted  a  wiser  and  safer  policy.  Virginia, 
Pennsylvania,  Maryland,  Louisiana,  and  some  other  States,  I  thjnk,  seven 
in  all.  do  not  allow  their  banks  to  issue  notes  under  five  dollars.  Every 
traveller  notices  the  difference,  when  he  passes  from  one  of  these  States  into 
those-where  small  notes  are  allowed.  The  evilvthen,  is  the  issuing  of  small 
notes  by  State  banks.  Of  these  notes,  that  is  to  say,  of  notes  under  five  dol- 
lars, the  amount  now  in  circulation  is,  doubtless,  eight  or  ten  millions  of  dol- 
lars. Can  these  notes  be  withdrawn?  If  they  can,  their  place  will  be  imme- 
diately supplied  by  a  specie  circulation  of  e^jual  amount.  The  object  is  a 
great  one,  as  it  is  connected  with  the  safety  and  stability  of  the  currency, 
and  may  well  justify  a  serious  reflection  on  the  means  of^fcr  '  '  .e  it. 

May  no't  Congress  and  the  State  Governments,  acting,  not  ...  _:>.iy,  but  se 
yerally,  to  the  same  end,  easily  and  quietly  attain  it?  I  think  they  may.  It 
is  but  for  other  States  to  follow  the  good  example  of  those  which  I  have  men- 
tioned, and  the  work  is  done.  As  an  inducement  to  the  States  to  do  this.  I 
propose,  in  the  present  bill,  to  reserve  to  Congress  a  power  of  withdrawing 
from  circulation  a  pretty  large  part  of  the  issues  of  the  Bank  of  the  United 
States.  I  propose  this,  so  that  the  State  banks  may  withdraw  their  small 
notes,  and  find  their  compensation  in  a  larger  circulation  of  those  of  a  higher 
denomination.  My  proposition  will  be,  that  at  any  time  after  the  expiration 
of  the  existing  charter  of  the  Bank,  that  is,  after  1836,  Congress  may,  if  it  see 


8 

fit,  restrain  the  Bank  from  issuing,  for  circulation,  notes  or  bills  under  a 
given  sum,  say  ten.  or  twenty  dollars.  This  will  diminish  the  circulation, 
and,  consequently,  the  profits  of  the  Bank;  but  it  is  of  less  importance  to  make 
the  Bank  a  highly  profitable  institution  to  the  stockholders,  tnan  that  it  should 
be  safe  and  useful  to  the  community.  It  ought  not,  certainly,  to  be  restrained 
from  the  enjoyment  of  al!  the  fair  advantages  to  be  derived  from  the  discreet 
use  of  its  capital,  in  banking  transactions;  but  the  leading  object,  after  all, 
in  its  continuance  is,  and  ought  to  be,  not  private  emolument,  but  public 
benefit. 

It  may,  perhaps,  strike  some  gentlemen,  that  the  circulation  of  small  notes 
might  be  effectually  discouraged,  by  refusing  to  receive  not  only  all  such 
small  notes,  but  all  notes  of  such  banks  as  issued  them,  at  the  custom  houses, 
land  offices,  post  offices,  and  other  places  of  public  receipt,  and  by  causing 
them  to  be  refused  also,  either  in  payment  or  deposite,  at  the  Bank  of  the 
United  States.  But  the  effect  of  such  refusal  may  be  doubtful.  It  would 
certainly,  in  some  degree,  discredit  such  notes,  but  probably  it  would  not 
drive  them  out  of  circulation  altogether;  and  if  it  should  not  do  this,  it  might, 
very  probably,  increase  their  circulation.  If,  in  some  degree  they  become  dis- 
credited, to  that  degree  they  would  become  cheaper  than  other  notes;  and 
universal  experience  proves,  that  of  two  things  which  may  be  current,  the 
cheaper  will  alvvays  expel  the  other.  Thus  silver  itself,  because  it  is  propor- 
tionally cheaper  with  us  than  gold,  has  driven  the  gold  out  of  the  country; 
that  is  to  say,  we  can  pay  a  debt  of  one  hundred  dollars,  by  tendering  that 
number  of  Spanish  or  American  dollars.  But  we  cannot  go  into  the  market 
and  buy  ten  American  eagles  for  these  hundred  silver  dollars.  They  would 
cost  us  a  hundred  and  four.  Thus,  as  we  can  pay  our  debts  cheaper  in  silver 
than  in  gold,  we  use  nothing  but  silver,  and  the  gold  goes  where  it  is  more 
highly  valued.  The  same  thing  always  happens  between  two  sorts  of  paper, 
which  are  found  at  the  same  time  in  circulation.  That  which  is  cheaper,  or 
of  jess  value  than.the  other,  always  drives  its  more  respectable  associate  out 
of  its  company. 

Measures,  therefore,  such  as  I  have  alluded  to,  would  be  likely,  I  fear,  ra- 
ther to  aggravate  than  to  remedy  the  evil.  We  must  hope  that  all  notes  under 
five  dollars  may  be  entirely  withdrawn  from  circulation,  by  the  consent  of 
the  States  and  the  State  banks;  ana  when  that  shall  be  done,  their  place  will 
be*immecKately  supplied  with  specie.  We  should  then  receive  an  accession 
of  ten  million  ofaollars,  at  least,  to  our  specie  circulation;  and  these  ten 
millions  will  find  their  place  not  in  the  Bank,  not  collected  any  where  in 
large  masses,  but  in  constant  use,  among  all  classes,  and  in  hourly  transfer 
from  hand  to  hand.  Jt  cannot  be  denied  that  such  an  addition  would  give 
great  strength  to  our  pecuniary  system,  discourage  excessive  exportation  of 
specie,  and  tend  to  restrain  and  correct  the  evils  of  over  trading.  England 
has  applied  the  like  remedy  to  a  similar  evil,  though  she  has  carried  the  re- 
striction much  higher,  and  allowed  the  circulation  of  no  notes  for  less  sums 
than  five  pounds  sterling. 

I  have  thought  this  subject,  Mr.  President,  of  so  much  importance,  as  that 
it  was  fit  to  present  it,  at  this  time,  to  the  consideration  of  the  Senate.  I 
propose  to  do  no  more,  at  present,  than  to  insert  such  a  provision  as  I  have 
described  in  this  bill;  in  the  mean  time,  I  hope  the  matter  may  attract  the  at- 
tention of  those  whose  agency  will  be  desired  to  accomplish  the  general  ob- 
ject. 

The  next  point  on  which  I  will  offer  a  few  remarks  is,  of  the  great  advantage 
of  the  Bank  in  the  operations  of  the  treasury— first,  in  the  collection, 
next,  in  the  disbursement,  of  the  revenue.  Ho\v  is  the  revenue  to  be  col- 
lected through  all  the  custom  houses,  the  land  offices,  and  the  post  offices, 
without  some  such  means  as'  the  Bank  affords?  Where  are  payments,  made 
at  the  custom  houses,  to  be  deposited?  In  whose  hands  are  these  large  sums  to 
be  trusted,  and  how  are  they  to  be  remitted  to  Washington,  or  wherever  else 
they  may  be  wanted?  I  dare  say,  sir,  that  the  operations  of  Government 
might  be  carried  on  in  some  way  without  the  agency  of  a  Bank;  but  the 
question  is  whether  they  could  be  carried  on  safely,  without  loss  and  without 
charge.  Look  to  the  disbursement  of  the  revenue.  At  present,  the  Bank  is 
bound  to  transmit  Government  funds  in  one  place  to  any  other  place,  without 


expense.  A  dollar,  at  St.  Louis  or  Nashville,  becomes,  at  once,  a  dollar  in 
New  Hampshire  or  Maine,  if  the  Treasury  so  choose.  This,  certainly,  is 
very  useful  and  convenient.  If  there  were  no  Bank  of  the  United  States  at 
New  Orleans  for  example,  duties  to  the  Government  at  that  place  must  be 
received,  either  in  specie  or  in  bills  of  local  banks.  If  in  the  former,  the  funds 
could  not  be  remitted  where  they  might  be  required,  without  considerable  ex- 
pense-—if  in  the  latter,  they  could  not  be  remitted  at  all.  until  first  convert- 
ed into  specie.  If  bills  of  exchange  were  resorted  to,  they  would  be  often  not 
to  be  had.  without  a  premium,  and  always  attended  with  more  or  less  risk. 
In  short,  the  utility  of  the  Bank,  in  collecting  and  disbursing  the  revenue,  in 
too  obvious  to  be  argued,  and  too  great  not  to  strike  any  one  conversant  with 
such  subjects,  without  the  aid  of  comment. 

I  have  alluded  to  its  dealings  in  foreign  exchanges  as  one  of  the  important 
powers  of  the  corporation.  There  are  those  who  think  this  power  ought  to 
be  withheld.  It  is,  I  think,  one  of  the  most  common  objections  to  the  Bank 
in  the  large  cities;  but  I  do  not  think  it  well  founded.  It  is  said  that  the 
trade  in  exchange  ou^ht  to  be  left  free,  like  other  traffic.  Be  it  so.  But,  then, 
why  not  leave  it  as  free  to  the  Bank, as  to  others?  The  Bank  enjoys  no  mo- 
nopoly. If  it  be  true,  that,  by  the  magnitude  of  its  capital,  and  the  distribu- 
tion of  its  several  offices,  it  acts  upon  the  rates  of  exchange,  not  locally,  but 
generally,  and  thus  occasionally  restrains  the  profit  of  dealing  in  one  place, 
by  bringing  the  general  rates  through  the  whole  country  nearer  to  a  uni- 
formity, the  occasional  profits  of  individuals  may  be  lessened,  but  the  general 
effect  is  beneficial  to  the  public.  If,  at  the  same  time  that  it  keeps  the  do- 
mestic exchanges  of  the  country  at  low  rates,  it  keeps  the  rates  of  foreign  ex- 
changes nearly  uniform  and  level,  I  hardly  know  how  it  could  do  greater  ser- 
vice to  the  commercial  community.  In  the  business  of  foreign  exchange,,  the 
Bank  has,  and  always  will  have,  powerful  rivals.  It  is  natural,  that  these  ri- 
vals should  desire  that,  in  this  particular,  the  bank  should  retire  from  busi- 
ness. But,  are  its  dealings  in  exchange  found  prejudicial,  by  those  who  deal 
in  it  themselves  no  further  than  to  buy,  for  their  own  remittances,  in  the  or- 
dinary way  of  business  ?  In  things  of  this  kind,  we  may  most  safely  guide 
ourselves  by  the  light  of  experience.  And,  takingit  for  granted,  that  the  gene- 
ral interest  of  the  trading  community  is  injured  by  sudden  fluctuations  in  ex- 
change, and  benefited  by  keeping  it  as  steady  as  the  commerce  of  the  conn  • 
try  will  allow — in  other  words,  by  keeping  the  price  of  bills  so  a"s  that  it  cor- 
responds with  the  real  state  of  the  exchange,  and  not  raised  or  lowered  for 
ends  of  speculation,  I  have  inquired,  of  those  who  could  inform  me,  whether, 
for  ten  or  twelve  years  past,  the  rates  of  exchange  have,  of  have  not,  been  as 
steady  and  unvarying,  as  may  ever  be  expected;  and  the  information  I  have 
received,  has  satisfied  me  that  the  power  of  the  Bank,  of  dealing  in  foreign 
exchange,  has  been  far  from  prejudicial  to  the  commercial  worm.  While 
there  is  a  dealer,  with  competent  funds  and  credit,  always  willing  to  sell 
foreign  bills  at  moderate  rates,  and  always  ready  to  buy  them,  also,  the  very 
nature  of  the  case  furnishes  a  considerable  degree  of  security  against  those 
fluctuations  which  arise  from  speculation,  although  it  leaves  private  dealings 
entirely  free.  If  that  power  should  be  now  taken  away  from  the  Bank,  I  think 
I  can  perceive  that  consequences  of  some  magnitude  would  follow,  in  par- 
ticular parts  of  the  country.  At  present,  the  producer,  or  the  shipper  of  pro- 
duce, at  New  Orleans,  Savannah,  or  Charleston,  in  making  shipments  for 
Europe,  can,  on  the  spot,  cash  his  bill,  drawn  against  such  shipment,  without 
charge  for  brokerage,  guaranty,  or  commission.  If  the  planter  has  sold  to 
the  shipper,  the  latter  has  his  bill  discounted,  and  pays  the" planter:  who  thus 
receives  the  price  for  his  crop  without  delay,  and  without  danger  of  loss.  Sup- 
pose the  Bank  were  denied  the  power  of  purchasing  foreign  bills.  AVhat 
would  be  the  necessary  operation  ?  The  producer,  or  shipper,  might  send  the 
cotton  or  the  sugar  to  the  North:  and,  in  that  case,  the  Bank  could  cash  his 
draft:  but,  if  he  sent  it  abroad,  his  bill  must  be  sent  to  his  agent,  in  the  bill 
market  of  the  northern  cities,  for  sale:  and  if  he  wishes  to  realize  the  amount, 
he  will  draw  on  his  agent,  and  sell  such  draft-  This  evidently  subjects  hhn 
to  a  double  operation,  and  to  the  expenses  of  commission,  guaranty,  &c.  It 
is  plain,  I  think,  that,  in  the  present  state  of  things,  the  shipper  of  Southern 
and  AVestern  produce,  enjoys  the  benefit  of  both  the  foreign  and  the  Northern 


10 

market,  more  perfectly  than  he  would  if  this  state  of  thirds  were  to  be  so 
changed  that  he  could  not  draw  on  his  consignee  in  the  foreign  market,  as 
advantageously  as  he  can  now  do  it. 

But,  if  there  be  a  question  about  the  utility  of  the  operations  of  the  Bank  in 
foreign  exchange,  there  can  be  none,  I  suppose,  as  to  its  influence  on  that 
which  is  internal  or  domestic.  I  speak  now  of  internal  exchange,  as  exchange 
merely,  without  considering  it  connected,  as  it  usually  i?,  with  advance,  or 
discount,  in  anticipation  of  the  maturity  of  bills.  In  regard  to  mere  exchange, 
the  operations  of  the  Bank  appear  to  have  produced  the  most  beneficial  effect. 
I  doubt  whether,  in  any  extensive  country,  the  rates  of  internal  exchange 
ever  averaged  so  low.  Before  the  Bank  went  into  operation,  three  or  four, 
or  five  per  cent.  was«m>t  uncommon,  as  the  difference  of  exchange  between 
one  extremity  of  the  country  and  the  other.  It  has,  at  times,  indeed,  as  I 
am  informed,  been  as  high  as  six  per  cent,  between  New  Orleans  and  Balti- 
more, and  between  other  places  in  the  country,  much  higher.  The 'vast 
amounts  bought  and  sold  by  the  Bank,  in  all  parts  of  the  country,  average, 
perhaps,  less  than  one  half  per  cent.  I  doubt  whether  this  exceeds  the  rates 
between  comparatively  neighboring  parts  of  Great  Britain  or  the  continent 
of  Europe,  [although  much  of  it  consists  in  exchange  between  the  extreme 
South,  and  the  Northern  and  Eastern  parts  of  the  Union. 

With  respect  to  the  effect  and  operation  of  the  Bank  upon  the  general  in- 
terests of  agriculture,  commerce,  and  manufactures,  there  will  be  found  a 
great  difference,  as  we  look  at  different  parts  cf  the  country.  Every  where, 
I  think,  they  have  been  salutary;  but  they  have  been  important,  in  very  dif- 
ferent degrees,  in  different  quarters.  The  influence  of  the  Bank  on  the  gene- 
ral currency  of  the  country,  and  its  operations,  in  exchanges,  are  benefits  of 
a  general  nature;  these  are  felt  all  over  the  country.  But,  in  loans  and  dis- 
counts— in  the  distribution  and  actual  application  of  its  capital — different  por- 
tions of  the  country  have  partaken,  and  are  partaking,  in  very  different  de- 
grees, The  "\yest  is  a  new  and  fast  growing  country,  with  vast  extent  of 
rich  land,  inviting  settlement  and  cultivation.  Enterprise  and  labor  are 
thronging  to  this  scene  of  useful  exertion,  and  necessarily  create  an  urgent 
demand  tor  capital.  This  demand  the  Bank  meets,  to  a  .very  considerable 
degree.  The  reports  of  the  Bank  show  the  existing  extent  of  its  accommoda- 
tion to  this  part  of  the  country.  In  the  n  hole  Southern  and  Western  States, 
that  is  to  say,  South  and  West  of  Philadelphia,  the  amount  exceeds  forty- 
three  millions  of  dollars.  In  the  States  lying  on  the  Mississippi,  and  its  wa- 
ters, it  exceeds  thirty  millions  of  dollars;  of  these  thirty  millions,  nineteen 
or  twenty  are  discounts  of  notes,  and  thd  residue  of  acceptances  of  bills  drawn 
on  other  parts  of  the  country.  This  last  amount  is  not,  strictly,  a  loan;  it  is 
an  advance  in  anticipation  of  a  debt;  but  other  advances  are  needed,  quite  as 
fast  as  this  is  paid  oft',  as  every  successive  crop  creates  a  new  occasion,  and 
a  new  desire,  to  sell  bills.  I  leave  it  to  Western  gentlemen  to  judge  how  far 
this  stale  of  things  goes  to  show  that  the  continuance  of  the  Bank  is  import- 
ant to  the  agriculture  and  commerce  of  the  West.  1  leave  it  to  them  to  con- 
template the  consequences  of  withdrawing  this  amount  of  capital  from  their 
country.  I  pray  them,  also,  to  inquire  what  is  to  be  their  circulating  medium, 
wheu  the  notes  of  the  Bank  are  called  in  ?  Do  they  see  before  them  neither 
difficulty  nor  danger  on  this  part  of  the  case?  Are  they  quite  confident  that, 
in  the  absence  of  the  bills  and  notes  of  the  Bank  of  the  United  States,  they 
need  have  no  fears  of  a  bad  currency,  depreciated  paper,  and  the  long  train 
of  ills  that  follow,  according  to  all  human  experience,  those  inauspicious 
leaders  ?  I  ask  them,  also,  to  judge  how  far  it  is  wise  to  settle  this  question 
now*  so  as  to  give  time  for  making  this  vast  change,  if  it  is  to  L¥e  made  at 
alj.  The  present  charter  is  to  continue  but  four  years.  If  it  be  not  renewed, 
this  debt  must  be  called  in  within  that  period;  not  a  new  note  can  be  taken 
to  the  Bank  fora  dollar  of  it  after  that  time.  The  whole  circulation  of  Bank 
notes,  too,  must  be  withdrawn.  Is  it  not  plain,  then,  that  it  is  high  time  to 
know  how  this  important  matter  is'to  be  adjusted  ?  The  country  could  not 
stand  a  sudden  recall  of  all  this  capital,  and  an  abrupt  withdrawal  of  this,  cir- 
culation. How.  indeed,  the  West  could  stand  the  change,  even  if  it  were 
begun  now,  and  conducted  as  gradually  and  as  gently  as  possible,  I  confess 
I  can  hardly  see.  The  very  commencement  of  the  process  of  recall,  however 


11 

slight,  would  be  felt,  in  the  prices  of  the  very  first  crop,  partly  from  the  im- 
mediate effect  of  withdrawing  .even  a  small  part  of  the  capital,  and  partly 
from  the  certainty  of  future  pressure,  from  withdrawing  the  rest.  Indeecf, 
gentlemen  must  prepare  themselves,  I  think,  for  some  effect  on  the  prices  of 
lands  and  commodities,  by  the  postponement  of  tliis  question,  should  it  take 
place,  as  well  as  for  embarrassments  in  other  respects.  That  postponement 
will,  at  best,  not  diminish  the  uncertainty  which  hangs  over  the  fate  of  the 
measure.  Seeing  the  hostility  which  exists  to  renewing  the  charter,  and  the 
extent  of  that  hostility,  if  the  measure  cannot  now  be  carried,  not  only  a  pru- 
dent regard  to  its  own  interests,  but  the  highest  duty  to  the  country  ought  to 
lead  the  Bank  to  prepare  for  the  termination  of  its  career.  It  has  not  before 
it  one  day  too  many  to  enable  it  to  wind  up,  without  distressing  the  public, 
such  vast  concerns.  If  it  were  certain  that  the  charter  was  to  be  renewed,  a 
postponement  would  be  of  little  importance.  But  this  is  uncertain,  and  a 
postponement  would  render  it  more  uncertain.  A  motion  to  postpone,  should 
such  be  made,  will  be  mainly  supported  by  those,  who,  either  on  constitu- 
tional grounds,  or  some  other  grounds,  are,  and  always  will  be,  against  the 
renewal.  A  postponement,  under  such  circumstances,  and  such  auspices, 
cannot  but  create  far  stronger  doubts  than  now  exist,  of  the  final  renewal  of 
the  charter. 

It  is  now  two  years  and  a  half  since  the  President  invited  the  attention  of 
Congress  to  this  subject.  That  invitation  has  been  more  than  once  repeated- 
Every  where,  the  subject  has  been  considered:  every  wher^,  it  has  been  dis- 
cussed. The  public  interest  now  requires  our  decision  upon  it;  and  the  pub- 
lic voice  demands  that  decision.  I  trust,  sir,  we  shall  make  it,  and  make  it 
wiaely. 

I  have  said  nothing,  sir,  of  the  applications,  some  of  them  from  highly  re- 
spectable sources,  for  a  new  Bank  to  a  new  set  of  proprietors, with  an  increas- 
ed premium  or  bonus,  and  other  offers  of  advantage. 

There  are  many  reasons  leading  me  to  the  conclusion,  that  no  such  mea- 
sure could  be  seriously  contemplated  by  Congress.  In  the  first  place,  the 
present  Bank  is  organized,  has  gone  through  the  uncertainties  and  dangers 
incident  to  such  institutions  at  their  commencement,  has  passed  the  point 
when  the  spirit  of  speculation  is  most  mischievous,  has  had  experience  in  the 
conduct  of  its  affairs,  and  become  fixed  and  settled  in  the : course  of  itsadminis- 
tration.  The  temptation  of  a  large  bonus  should  not  induce  us  to  disturb 
what  is  satisfactorily  at  rest,  create  new  occasions  for  speculation,  and  place 
great  interests  in  the  safe  keeping  of  an  untried  trustee.  In  the  next  place, 
the  discontinuance  of  one  Bank,  and  the  establishment  of  another,  could  not 
be  accomplished  without  great  inconvenience  to  the  community.  How  is  all 
the  capital  of  the  present  Bank  to  be  withdrawn  from  its  employment,  and  a 
vacuum  left,  till  a  new  institution  shall  come  with  means  to  fill  it,  without 
intolerable  embarrassment  to  the  people?  Are  the  debtors  to  the  present 
Bank  to  be  pressed  for  payment,  that  the  corporate  franchise  may  change 
hands,  simply  for  an  increased  bonus,  and  to  try  the  experiment  ol  change? 
Is  the  Bank  to  begin  to  collect  its  debts,  to  decline  its  customary  advances, 
to  withdraw  old  credits,  to  refuse  new  ones,  to  suspend  exchanges  and  remit- 
tances; in  a  word,  to  displace  lifty  millions  of  active  commercial  capital,  now 
in  full  employment,  and  to  withdraw,  also,  twenty  millions  of  notes  from  the 
general  circulation,  for  no  purpose  but  to  enable  us  to  bring  a  new  insti- 
tution into  the  place  of  the  old?  He  is  a  statesman  of  some  confidence  in 
his  own  <-kili,  who  thinks  he  could  accomplish  such  a  change  without  public 
inconvenience.  He  is  a  statesman,  too,  of  no  ordinary;  penetration,  who  can 
discover  adequate  motives  for  it.  And,  in  the  lust  place,  the  public  opinion 


long  its  existence. 

Mr.  President,  the  motives  *wh!c!>  prescribe  my  own  line  of  conduct  on 
this  occasion,  are  not  drawn  from  any  l<;cal  considerations.  The  State  iu  whose 
representation  I  bear  a  part,  has  as  little  interest,  peculiar  to  itself,  in  the 
continuance  of  this  corporation,  as  any  State  in  the  Union.  She  does  not  Heed 


12 

nthe  aid  of  its  capital,  because  the  state  of  her  commerce  and  manufactures 
<  does  not  call  for  the  employment  of  more  capital  than  she  possesses.  She 
does  not  need  it,  in  any  peculiar  degree,  certainly,  as  any  restraint  or  correc- 
tive on  her  own  paper  currency.  Her  banks  are  as  well  conducted  as  those 
of  other  States.  But  she  has  a  common  interest  in  the  continuance  of  a  use- 
ful institution.  She  has  an  interest  in  the  wise  and  successful  administration 
of  the  Government,  in  all  its  departments.  She  is  interested  that  the  general 
currency  of  the  country  should  be  maintained  in  a  sale  and  healthy  state. 
She  derives  a  benefit,  with  others,  (I  believe  it  a  great  benefit,)  from  the 
facility  of  exchanges  in  internal  commerce,  which  the  Bank  affords.  This 
is  the  sum  of  her  motives.  For  these  reasons,  she  is  willing  that  the  Bank 
should  be  continued,  but  if  the  matter  should  be  otherwise  determined, 
however  much  she  would  regret  it  on  general  and  public  grounds,  she  cer- 
tainly does  not  apprehend,  from  such  a  result,  inconveniences  to  her  own  ci- 
tizens, such  as  may,  and  must,  fall,  so  far  as  I  can  see,  on  some  others. 

Mr.  President,  1  will  take  leave  of  the  subject  for  the  present,  with  a  re- 
mark which  I  think  is  due  from  me.  For  some  years  past,  I  have  not  been 
inattentive  to  the  general  operations  of  the  Bank,  or  to  their  influence  on  the 
public  interests,  and  the  convenient  administration  of  the  Government;  and  I 
take  the  occasion  to  say,  with  sincerity  and  cheerfulness,  that,  during  that 
period,  its  affairs  have  been  conducted,  in  my  opinion,  with  fidelity,  as  well 
towards  the  Government  as  towards  its  own  stockholders;  and  that  it  has 
sought  the  accomplishment  of  the  public  purposes,  designed  by  its  institution, 
with  distingutshed'ability  and  distinguished  success. 


At  a  subsequent  period  of  the  debate, 

Mr.  MOORE,  of  Alabama,  moved  to  amend  the  bill  for  modifying  and  con- 
tinuing the  charter  of  the  Bank  of  the  United  States,  by  introducing  two  pro- 
visions: 

1st.  That  the  Bank  shall  not  establish,  nor  continue,  any  office  of  discount  and  de- 
posite,  or  branch  bank,  in  any  State,  without  the  consent  and  approbation  of  the  State; 

2d.  That  all  such  offices  or  branches  shall  be  subject  to  taxation,  according  to  the 
amount  of  their  loans  and  issues,  in  like  manner  as  other  banks,  or  other  property,  in 
the  State,  shall  be  liable  to  taxation. 

On  this  amendment,  Mr.  WEBSTER  said,  he  trusted  the  Senate  would  not 
act  on  these  propositions,  without  fully  understanding  their  bearing  and  ex- 
tent. For  my  own  part,  said  he,  I  look  upon  the  two  parts  of  the  amendment 
as  substantially  of  the  same  character.  Each,  in  my  opinion,  confers  a  pow- 
er on  the  States  to  expel  the  Bank  at  their  pleasure;  in  other  words,  entirely 
to  defeat  the  operations  and  destroy  the  capacity,  for  usefulness,  of  the  whole 
institution.  'I  he  simple  question  is,  shall  we,  by  our  own  act,  in  the  charter 
itself,  give  the  States  permission  to  expel  the  Bank  a»d  all  its  branches  from 
their  limits,  at  their  own  pleasure.  Tne  first  pai...  of  the  amendment  gives 
this  permission  in  express  terms;  and  the  latter  part  gives  it,  in  effect,  by  au- 
thorizing the  States  to  tax  the  loans  and  issues  of  the  Bank,  with  no  effectual 
limitation.  It  appears  to  me  idle  to  say,  that  the  power  may  be  safely  given, 
because  it  will  not  be  exercised.  It  is  to  be  given,  I  presume,  on  the  supposi- 
tion that,  probably,  sonffe  of  the  States  will  choose  to  exercise  it;  else,  why  is 
it  given  at  all?  And  will  they  not  so  choose  ?  We  have  already  heard,  in 
the  course  of  this  debate,  of  two  cases  in  which  States  attempted  to  exercise 
a  power  of  this  kind,  when  they  did  not,  constitutionally,  possess  it.  Two 
States  have  taxed  the  branches,  for  the  avowed  purpose  of  driving  them  out 
of  their  limits,  and  were  prevented  from  accomplishing  this  object,  merely  by 
force  of  judicial  decisions  against  their  right.  If,  then,  these  attempts  nave 
been  made  to  exercise  this  power,  when  it  was  not  legally  possessed,  and 
against  the  will  of  Congress,  is  there  any  doubt  it  will  be  exercised,  when  its 
exercise  shall  be  permitted,  and  invited,  by  the  proposed  amendment  ?  I  have 
no  doubt,  the  power,  if  granted,  will  be  exercised,  and  the'main  object  of  con- 
tinuing the  Bunk  thus  defeated. 


13 

I  have  already  said,  that  the  second  branch  of  the  amendment  is  as  objec- 
tionable and  as  destructive  as  the  first.  I  think  it  is  so.  It  appears  to  me  to 
give  ample  power,  by  means  of  taxation,  to  expel  the  Bank  from  any  State 
which  may  choose  to  expel  it.  It  gives  a  power  of  taxation  without  fixed 
limits,  or  any  reasonable  guards.  And  a  power  of  taxation,  without  fixed 
limits,  and  without  guards,  is  a  power  to  embarrass,  a  power  to  oppress,  a 
power  to  expel,  a  power  to  destroy.  The  States  are  to  be  allowed  to  tax  the 
branches  according  to  the  amount  of  their  loans  and  discounts,  in  like  man- 
ner as  other  banks,  or  other  property  in  the  State,  shall  be  liable  to  taxation. 
fe  Now,  sir,  some  of  the  States  have  no  banks.  Of  course  they  tax  no  banks. 
In  other  States,  the  banks  pay  the  State  a  bonus  on  their  creation,  and  are  not 
otherwise  taxed.  In  other  cases,  the  State  in  effect  itself  owns  the  bank,  and 
a  tax  on  it,  therefore,  would  be  merely  nominal.  Besides,  no  State  is  to  be 
bound  to  lay  this  tax,  as  it  taxes  its  own  banks.  It  has  an  option  to  tax  it  in 
that  manner,  or  as  other  properly  is  taxed.  What  other  property?  It  may 
be,  as  lottery  tickets,  gaming  tables,  or  other  things  which  may  be  deemed  fit 
to  be  discouraged  or  suppressed,  are  taxed.  The  bank  may  be  classed  with 
other  nuisances,  and  driven  out,  or  put  down,  by  taxation.  All  this  is  perfectly 
within  the  scope  of  the  amendment.  The  license  is  broad  enough  to  authorize 
anything  which  may  be  designed,  or  wished. 

JNow,  sir,  in  the  first  place,  I  doubt  exceedingly  our  power  to  adopt  this 
amendment,  and  I  pray  me  deliberate  consideration  of  the  Senate  in  regard 
to  this  point.  In  the  first  place,  let  me  ask,  what  is  the  constitutional  ground 
on  which  Congress  created  this  corporation,  and  on  which  we  now  propose  to 
continue  it?  There  is  no  express  authority  to  create  a  bank,  or  any 'other 
corporation,  given  to  us  by  the  constitution.  The  power  is  derived  by  im- 
plication. It  has  been  exercised,  and  can  be  exercised  only  on  the  ground 
of  a  just  necessity.  It  is  to  be  maintained,  if  at  all,  on  the  allegation  that 
the  establishment  of  a  National  Bank  is  a  just  and  necessary  mean  of  carry- 
ing on  the  Government,  and  of  executing  the  powers  conferred  on  Congress 
by  the  constitution.  On  this  ground,  Congress  has  established  this  bank,  and 
on  this,  it  is  now  proposed  to  be  continued.  And  it  has  already  been  judi- 
cially decided,  that  Congress  having  established  a  bank  for  these  purpose", 
the  constitution  of  the  United  States  prohibits  the  States  from  taxing  it. 
Observe,  sir,  it  is  the  constitution,  not  the  law,  which  lays  this  prohibition  on 
the  States.  The  charter  of  the  Bank  does  not  declare  that  the  States  shall 
not  tax  it  It  says  not  one  word  on  that  subject.  The  restraint  is  imposed, 
not  by  Congress,  but  by  a  higher  authority — the  constitution.  The  true 
and  well  settled  doctrine  is,  that  all  subjects  over  which  the  power  of  a  State 
extends,  are  objects  of  State  taxation;  but  those  over  which  it  does  not  ex- 
tend, are  exempt  from  its  taxation.  The  power  of  a  State  extends  to  every 
thing  which  exists  by  its  own  authority,  or  is  introduced  by  its  own  permis- 
sion; but  it  does  not  extend  to  those  means  which  are  employed  by  Congress, 
to  carry  into  execution  the  powers  conferred  on  it  by  the  People  of  the  United. 
States.  A  single  State  cannot  give  a  power  to  tax  an  instrument,  created 
and  employed  by  the  Government  of  the  whole  Union;  nor  can  it,  by  taxa- 
tion or  otherwise,  retard,  impede,  burden,  or  control  the  operation  of  a  law, 
constitutionally  passed  by  Congress.  If  individuals  acquire  property,  under 
the  operation  ot  the  law  creating  the  Bank,  or  any  other  law  of  Congress, 
such  property  is  taxable,  in  their  hands,  in  the  same  manner  as  other  property 
of  a  similar  kind  is  taxable.  But  it  is  a  necessary  consequence,  from  the  con- 
stitutional supremacy  of  the  Government  of  the  whole  Union,  that  the  action 
of  Congress,  in  the  exercise  of  its  lawful  powers,  should  not  be  embarrassed, 
by  conflicting  power,  exercised  or  asserted  by  particular  States;  and  that  no 
State  can  rightfully  hinder  or  obstruct  the  free  course  of  those  measures 
which  the  Government  of  the  whole  Union  may  rightfully  adopt.  The  powers 
of  the  Bank  of  the  United  States  are  not  granted  by  the  individual  States, 
nor  does  it  exist  by  their  permission.  Its  franchise  is  not  of  State  origin,  but 
flows  from  another  source.  It  is  not  ope  of  those  subjects  over  which  the 
power  of  the  State  extends;  and  therefore  it  is  not  rightfully  an  object  of  State 
taxation.  All  this  I  take  to  be  as  well  settled,  as  any  thing  can  be  settled  by  the 
practice  of  the  Government,  the  laws  of  Congress,  and  the  decision  of  the  judi- 
cial tribunals.  Now,  sir,  I  ask,  how  we  can  relieve  the  States  from  this  constitu- 


14 

tional  prohibition?  It  is  true,  that  this  prohibition  is  not  imposed  in  express 
terms;  but  it  results  from  the  general  provisions  of  the  constitution,  ana  has 
been  judicially  decided  to  exist  in  full  force.  This  is  a  protection,  then, 
\\liich  the  constitution  of  the  United  States,  by  its  own  force,  holds  over 
this  instrument,  which  Congress  has  deemed  necessary  to  carry  on  the  Govern- 
ment. Can  we  throw  offthiS  constitutional  protection?  I  think  it  clear  we  cannot- 
We  cannot  repeal  the  constitution.  We  cannot  say  that  every  power,  every 
branch,  every  institution,  and  every  law  of  this  Government)  shall  not  have 
all  the  force,  all  the  sanction,  and  all  the  protection,  which  the  constitution 
gives  it.  By  the  constitution  every  law  of  Congress  is  finally  to  be  consi- 
dered, and  its  construction  ultimately  settled,  by  the  Supreme"  Court  of  the 
United  States.  These  very  acts,  before  referred  to,  taxing  the  banks,  were 
held  valid  by  more  or  fewer  of  the  State  judicatures,  but  were  finally  pro- 
nounced unconstitutional  by  the  Supreme  Court;  and,  this,  not  by  force  of  any 
words  in  the  charter,  but  by  force  of  the  constitution  itself.  I  ask,  whether  it  is 
competent  for  us  to  reverse  this  provision  of  the  constitution,  and  say  that  the 
laws  of  Congress  shall  receive  their  ultimate  construction  from  the  State  courts? 
Again;  the  constitution  gives  Congress  a  right  to  lay  duties  of  impost,  and  it 
prohibits  the  exercise  of  any  such  power  by  the  States.  Now,  it  so  happens,tliat 
the  national  treasury  is  full, and  the  State  treasuries  are  far  less  so.  It  might  be 
thought  very  convenient  that  a  part  of  ^he  imposts,  at  the  custom  house,  should 
be  received  by  the  States.  But  will  any  man  say  that  Congress  could  authorize 
the  States  to  lay  and  collect  imposts,  under  any  restrictions  or  limitations 
whatever?  No  one  will  pretend  it.  That  woulu  be  to  make  a  new  partition 
of  power  between  this  Government  and  the  State  Governments.  Mr.  Madi- 
son has  observed,  that  the  assent  of  the  States  cannot  confer  a  new  power 
on  Congress,  except  in  those  cases  especially  provided  in  the  constitution. 
This  is  very  true,  and  it  is  equally  true,  that  the  States  cannot  obtain  a  new 
power,  by  the  consent  of  Congress,  against  the  prohibition  of  the  constitution, 
except  in  those  cases  which  are  expressly  so  provided  for  in  the  constitution 
itself. 

These  reasons,  sir,  lead  me  to  think,  that  if,  for  purposes  connected  with 
the  beneficial  administration  of  the  Government,  we  deem  it  necessary  to  con- 
tinue this  corporation,  we  are  not  at  liberty  to  repeal  any  protection,  or  any 
immunity,  with  which  the  constitution  surrounds  it.  Wre  cannot  give  to  a  law 
of  the  United  States  less  than  its  constitutional  effect.  The  constitution  says, 
that  every  such  law,  passed  in  pursuance  of  the  constitution,  shall  be  para- 
mount to  any  State  law.  We  cannot  enact  that  it  shall  not  be  so;  for  that 
would  be  to  repeal,  so  far,  the  constitution. 

It  is  asked,  whether,  after  all,  the  powers  of  the  Bank  will  be  any  greater 
than  we  choose  to  make  them,  and  whether  we  may  not  prescribe  to  it  any 
terms  or  conditions  which  we  see  fit?  If  I  were  to  admit  the  affirmative  of 
both  these  questions  to  be  true,  no  concession  would  be  made,  favorable  to  the 
proposed  amendment.  If  the  powers  of  the  Bank  shall  be  no  more  than  we 
choose  to  make  them,  and  if  we  may  prescribe  to  it  whatever  terms  and  con- 
ditions we  please,  it  by  no  means  follows  that  we  may  leave  it  to  others  also 
to  prescribe  what  terms  and  conditions  they  please.  We  are  constituting  a 
Bank  by  our  own  law,  for  our  own  ends.  The  constitution  of  this  Bank  will 
consist,  not  only  of  the  positive  powers  which  are  granted  to  it,  but  of  all 
the  conditions,  terms,  and  liabilities,  to  which  it  is  made  subject.  All  these 
we  may  prescribe  ourselves;  but  how  can  we  invest  others  vvitK  the  power  of 
prescribing  them?  How  can  we  delegate  our  own  legislative  trust?  We  are 
passing  a  law  which,  if  constitutional,  is  to  be  the  supreme  law;  it  is  to  be 
paramount  overall  State  laws;  how, then,  can  we  confer  on  State  Legislatures 
a  power  to  control,  modify, or  interfeie  with  it,  by  their  own  laws? 

Allow  me  now,  Mr.  President,  to  inquire  on  what  ground  it  is  now 
here  contended  that  the  States  may  claim  this  power  of  taxation.  They 
cannot  claim  it  as  a  power  to  tar.  all  property  of  their  own  citizens. 
This  they  possess,  without  denial  or  doubt.  Every  stockholder  in  the 
Bank  is  liable  to  be  taxed  tor  his  property  therein,  by  the  State  of 
which  he  is  a  citizen.  This  right  is  exercised,  I  believe,  by  all  the 
States  which  lay  taxes  on  moimy  at  interest,  income,  and  other  subjects 
of  that  kind.  It  is,  then,  not  that  they  maybe  authorized  to  tax  the  pro- 


A     000  583  303 

perty  of  their  own  citizens.    Nor  is  it  because  any  ouue  uue»  uut  pai  un- 
pate  in  the  advantage  of  the  premium,  or  bonus,  paid  by  the  Bank  to  Govern-  . 
ment  for  the  charter.  That  sumgoes  into  the  treasury  for  the  general  good  of  all. 

Nor  can  the  claim  be  sustained,  on  the  strength  of  the  mere  circum- 
stance, that  a  branch,  or  an  office,  is  established  "in  a  State.  Such  office, 
or  branch,  is  but  an  agency.  It  is  not  a  body  politic  or  corporate.  It 
has  no  legal  existence  of  itself.  It  is  but  an  agent  of  the  general  corpora- 
tion. That  these  agents  have  their  residence  or  place  of  business,  in  a  par- 
ticular State,  is  not  of  itself  the  foundation  of  any  claim.  But,  according  to 
the  language  of  the  amendment,  the  ground  of  tins  claim  to  tax,  is  evidently 
the  loans  and  issues;  and  these  loans  and  issues,  properly  speaking,  are  the 
loans  and  issues  of  the  Bank.  The  office,  as  an  agent,  conducts  the  arrange- 
ment, it  is  true;  but  the  notes  which  are  issued  are  notes  of  the  Bank,  and  the 
debts  created,  are  debts  due  to  the  Bank.  The,  circulation  is  the  circula- 
tion of  the  Hank.  Now,  the  truth  is,  what  this  amendment  proposes  to 
give  to  the  States,  is,  a  right  to  tax  the  circulation  of  the  Sank.  There 
is  no  pretence  to  say  that  the  proposed  tax  is  a  tax  on  property,  real  or 
personal.  The  Bank  is  authorized  to  issue  its  notes  in  loans:  and,  in  doing 
this,  it  simply  exercises  a  power  conferred  on  it  by  law,  and  enters  into  a 
contract  which  that  law  expressly  authorizes,  and  for  which  it  prescribes  va- 
rious regulations.  The  law  declares  that  the  Bank  may  issue  its  own  notes 
for  circulation;  and  the  same  law  declares  that  these  notes  shall  be  a  currency 
lor  the  payment  of  debts  due  to  Government.  A  tax  on  loans  and  issues, 
then,  is  a  tax  which  bears  directly  on  the  exercise  of  a  power  created  by  Con- 
gress for  public  uses  and  purposes.  The  amendment,  therefore,  does  autho- 
rize one  part  of  the  country — a  single  State — to  impede,  embarrass,  or  alto- 
gether destroy  a  law,  made  by  the  Legislature  of  the  whole  country,  for  the 
good  of  the  whole,  notwithstanding  that  the  constitution  expressly  declares, 
that  the  law,  passed  by  the  Legislature  of  the  whole  country,  shall  be 
supreme.  It  is  on  the  right,  asserted  for  the  States,  to  tax  the  opera- 
tions of  a  franchise,  created  by  the  United  States,  that  the  argument 
for  the  amendment  avowedly  rests.  The  very  form  and  words  of  the 
argument  show  this.  The  common  way  of  stating  it  is  that,  since  State 
banks  pay  a  tax  to  the  State,  these  branch  banks  coming  in  to  do  business 
among  them  ought  to  pay  a  similar  tax.  But  the  State  baifcs  pay  the  tax  to 
the  State  for  the  privilege  of  circulation;  and  the  proposition  is,  therefore, 
neither  more  nor  less  than  that  the  United  States'  Bank  shall  pay  the  States 
for  the  same  privilege.  The  circulation  of  the  bills  is  the  substance — the 
locality  of  the  office  is  but  an  incident.  An  office  is  created,  for  example,  on 
Connecticut  river,  either  in  Massachusetts,  Vermont,  Connecticut,  or  New 
Hampshire.  The  notes  of  the  Bank  are  loaned  at  this  office,  and  put  in  circu- 
lation in  all  these  States.  Now  no  one  will  say,  that  the  State  where  the 
office  happens  to  be  placed,  should  have  a  right  to  lay  this  tax,  and  the  other 
States  have  no  such  right.  This  would  be  a  merely  arbitrary  distinction.  It 
would  be  founded  on  no  real  or  substantial  difference;  and  no  man,  I 
think,  can  seriously  contend  for  it.  Under  this  very  amendment,  Penn- 
sylvania would  be  authorized  to  collect  a  large  tax,  and  New  Jersey  no 
tax  at  all,  although  the  State  circulation  of  New  Jersey  is  as  much 
affected  and  diminished,  as  that  of  Pennsylvania,  by  the  circulation 
of  the  Bank  of  the  United  States.  The  States  which  have  the  benefit  of 
branches,  (if  it  be  a  benefit,)  are  to  have  the  farther  advantage  of  taxation: 
while  other  States  are  to  have  neither  the  one  nor  the  other.  Founding  the 
claim  on  the  State  right  to  derive  benefit  from  the  paper  circulation  which 
exists  within  it,  the  advocates  of  the  claim  are  clearly  not  consistent  with 
themselves,  when  they  support  a  measure  which  professes  to  protect  that 
right  in  some  States,  and  to  leave  it  unprotected  in  others. 

But  the  inequality  of  the  operation  of  this  amendment,  is  not  the  only,  nor 
the  main  objection  to  it.  It  proceeds  on  a  principle  not  to  be  admitted.  It 
asserts,  or  it  takes  for  granted,  that  the  power  of  authorizing  and  regulating 
the  paper  currency  of  the  country,  is  an  exclusive  State  right.  The  ground 
assumed  can  be  no  less  broad  than  this;  because,  the  Bank  of  the  Xlnited 
States,  having  the  grant  of  a  power  from  Congress  to  issue  notes  for  circula- 
tion, its  right  is  perfect,  if  Congress  could  make  such  grant.  It  owes  nothing 


Y- 

16  A 

to  the  States,  if  Congress  could  give  what  it  has  undertaken  to  give;  that  is  <o 
!  its  own  authority,  may  confer  a  right  to  issue  paper  for 
M.  Now,  ,-ir,  whosoever  denies  this  right  in  Congress,  denies  of 
roume  its  power  to  create  such  a  Bank  as  now  exists.  The  Bank  of  the  Unit- 
ed States  is  quite  unconstitutional,  if  the  whole  paper  circulation  belongs  to  the 
States;  because  the  Bank  of  the  United  Slates  is  a  Bank  of  circulation,  and  was 
so  intended  to  be  by  Congress.  The  power  of  issuing  note-  for  circulation  is  not 
an  indispensable  ingredient  in  the  constitution  of  a  bank,  merely  as  a  bank.  The 
earlier  banks  did  not  possess  it,  and  many  good  ones  have  existed  without  it. 
**  On  what  ground  is  it  then,  that  Congress  possesses  the  power,  not  only  to 
create  a  bank,  but  a  bunk  of  circulation?  Simply,  as  I  suppose,  because  Con- 
gress possesses  a  constitutional  control  over  the  currency  of  the  country,  and 
has  power  to  provide  a  safe  medium  of  circulation,  as  well  for  other  purposes 
as  for  the  collection  of  its  own  debts  and  revenue.  The  Bank,  therefore,  al- 
ready possesses  unconstitutional  power,  if  the  paper  circulation  be  the  subject, 
exclusively,  of  State  right,  or  State  regulation.  Indeed,  sir,  it  is  not  a  little 
startling  that  such  exclusive  right  should  now  be  asserted.  I  observed,  the 
other  day.  that,  in  my  opinion,  it  was  very  difficult  to  maintain,  on  the  face  of 
the  constitution  itself,  and  independent  of  long  continued  practice,  the  doc- 
trine, that  the  States  could  authorize  the  circulation  of  bank  p;;per  at  all. 
They  cannot  coin  money.  Can  they  then  coin  that  which  becomes  the  actual 
and  almost  the  universal  substitute  for  money?  Is  not  the  right  of  issuing 
paper,  intended  for  circulation,  in  the  place,  and  as  the  representative  of  me- 
tallic currency,  derived  merely  from  the  power  of  coining  and  regulating  that  . 
metallic  currency?  As  bringing  this  matter  to  a  just  test,  let  me  ask  whether 
Congress,  if  it  had  not  the  power  of  coining  money,  and  of  regulating  the 
value  of  foreign  coins,  could  create  a  bank  with  the  power  to  circulate  bills? 
For  one,  I  think  it  would  be  difficult  to  make  that  out.  Where,  then,  do  the 
States,  to  whom  all  control  over  the  metallic  currency  is  altogether  prohibited, 
obtain  this  power?  It  is  true,  that,  in  other  countries,  private  bankers,  having  no 
legal  authority  over  the  coin,  issue  notes  for  circulation;  but  this  they  do  al- 
ways with  the  consent  of  Government,  express  or  implied,  and  Government 
restrains  and  regulates  all  their  operations  at  its  pleasure.  It  would  be  a 
startling  proposition,  in  any  other  part  of  the  world,  that  the  prerogative  of 
coining  money,«^eld  by  Government,  was  liable  to  be  defeated,  counteracted, 
or  impeded,  by  another  prerogative,  held  in  other  hands,  of  authorizing  a 

Eaper  circulation.  It  is  further  to  be  observed,  that  the  States  cannot  issue 
ills  of  credit;  not  that  they  cannot  make  theni  a  legal  tender,  but  that  they 
cannot  issue  them  at  all.  Is  not  this  a  clear  indication  of  the  intent  of  the 
constitution  to  restrain  the  States,  as  well  from  establishing  a  paper  circula- 
tion, as  from  interfering  with  the  metallic  circulation?  Banks  have. been 
created  by  States,  with  no  capital  whatever,  their  notes  being  put  into  circu- 
lation simply  on  the  credit  of  the  State.  What  are  the  issues  of  such  banks, 
but  bills  of  credit,  issued  by  the  State? 

I  confess,'  Mr.  President,  that  the  more  I  reflect  on  this  subject,  the  more 
clearly  does  my  mind  approach  the  conclusion,  that  the  creation  of  State 
banks,  for  the  purpose,  and  with  the  power  of  circulating  paper,  is  not  con- 
sistent with  the  grants  and  the  prohibitions  of  the  constitution.  But.  sir,  this 
is  not  now  the  question.  The  question  is  not  whether  the  States  have  the 
power;  it  is  whether  they  alone  have  the  power.  May  they  rightfully  ex- 
clude the  United  States  from  all  interference  with  the  paper  currency?  Are 
we  interlopers,  when  we  create  a  Bank  of  circulation?  Do  we  owe  them  a 
seignorage  for  the  circulation  of  bills,  by  a  Corporation  created  by  Congress? 
Certainly  not.  It  has  been  decided  by  solemn  adjudication  that  Congress 
may  authorise  the  Bank  to  circulate  its  bills,  as  currency,  and  that  no  State 
can  rightfully  interrupt  that  circulation,  by  taxation  or  any  other  means.  I 
shall  never  agree  to  surrender  that  authority.  I  would  as  soon  yield  the 
coinage  power  itself;  nor  do  I  think  there  would  be  much  greater  danger,  nor 
a  much  clearer  departure  from  constitutional  principle,  in  consenting  to  such 
a  surrender,  than  in  acquiescing  in  what  is  now  proposed. 


